Smyrna Council approves change in electric rates

Smyrna Town Council unanimously approved a revision of electric rates at their April 1 meeting.

The approval will see an increase in the customer service charge for both commercial non-demand and commercial demand electric customers; the winter/summer rates for these customers will also be reduced to balance out the changes.

Councilman Robert Johnson, chair of the town's Utility Committee, said the changes are part of an ongoing process to reexamine and in some cases reset electric rates by customer class to address some questions of equity.

Town Manager Dave Hugg said the first aspect of the changes dealt with the customer charge, which is the basic charge a customer has in the Town of Smyrna regardless of how much energy is used.

The basic rate for residents is $11 a month, while both non-demand and demand commercial/industrial customers have a rate of $6.50.

"Obviously there's an inequity there that's been brought to our attention a number of times," Hugg said. "However, the council and committee had not been in a position to go through the process of changing some of the rate structures."

With council's approval, the rate of non-demand commercial customers will now be the same level as residents, which is $11 per month. The rate for larger demand commercial customers will increase to $25 a month.

Hugg said the increase makes it more equitable in terms of cost providing services to very large customers.

Councilman Jeff Flairty said the customer service charge is more or less for construction upkeep and that the larger customers cost more to maintain.

"A small residential parcel doesn't cost as much to provide service to as Walmart," Flairty said.

The next part of the recommendation will see the town lower both non-demand and demand commercial customer's winter/summer rate.

Hugg said the committee wants to begin leveling out the winter and summer charges to try and match how the town is actually billed for energy from the wholesale provider. He said the two changes are revenue neutral since the basic charge is going up and the electric rate is going down.

Moreover, Flairty said it's important to note that the town will not make any more money in the process since it is revenue neutral.

"That was not our intent to make more money out of the process," Flairty said. "The total intent here was to try and make it a more responsible billing process to the customer."

More change to come

During his explanation of the recommendation, Hugg also informed council of the Utility Committee's intent to lower the PPCAC (Purchase Power Cost Adjustment Charge) portion of a customer's bill. The rate is used to deal with the fluctuations in energy prices.

Page 2 of 2 - Hugg said lowering the PPCAC will result in a decrease in electric rates for all customers.

"This is a result of much more favorable energy markets and long-term purchases that DEMEC has made on our behalf," Hugg said.

At the council meeting, Hugg said the committee was considering reducing the PPCAC from .0126 to .0052. He said the change would essentially cut the PPCAC rate in half.

The Utility Committee met on April 3. Hugg said on Friday that the members decided to decrease the PPCAC from .0126 to .0053.